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(2nd LD) S. Korea's consumer prices growth hits almost 5-yr high in March

All News 11:06 April 04, 2017

(ATTN: ADDS finance ministry's comments in paras 12-14)

SEJONG, April 4 (Yonhap) -- South Korea's consumer prices shot up at the fastest clip in nearly five years in March on a sharp rise in gas prices, government data showed Tuesday.

The country's consumer price index gained 2.2 percent last month from a year earlier, accelerating from the previous month's 1.9 percent rise, according to the data compiled by Statistics Korea.

The March number marked the highest on-year gain since June 2012.

From a month earlier, the index stayed unchanged at 102.79 in March, with it set at 100 in 2015.

Core inflation, which excludes volatile oil and food prices, increased 1.7 percent compared with last year.

(2nd LD) S. Korea's consumer prices growth hits almost 5-yr high in March - 1

The statistics office said rising gas prices at the pumps and utility bills pushed up the inflation, along with expensive fruits and vegetables.

Prices of gasoline and petroleum products advanced 14.4 percent last month from a year ago amid an upturn in global crude oil prices.

Gas prices at the pump jumped 12.4 percent on-year last month and those of diesel gained 18.2 percent on-year, while a 3.9 percent hike in natural gas rates also lent support to the monthly consumer price hike.

Also, prices of fresh fruit and vegetables jumped 7.5 percent in March from a year earlier following the winter season.

In particular, prices of tangerines surged 106.2 percent on-year last month, with those of cabbage and carrots soaring 91.5 percent and 71.8 percent, respectively.

"The steep inflation is expected to ease in the coming months as the pace of the global oil price hike slowed down to some extent," said Woo Young-jae, director of the price statistics division at the statistical bureau. "And the supply of agricultural products will expand with the spring season coming soon."

The finance ministry also said there is limited possibility that the consumer prices have already entered a upside cycle, largely because of the slowing pace of oil price hikes.

The price of Dubai crude, South Korea's benchmark, hovered around US$51.2 per barrel in March, slightly down from $54.4 in February and $53.7 in January, according to separate ministry data.

"But still we have to check the fluctuation of oil prices and weather conditions that can create a drag on inflation," the ministry said.

South Korea had suffered from low inflation over the past two years amid a low oil price trend. The consumer price index grew 0.7 percent and 1 percent in 2015 and 2016, respectively, failing to meet the central bank target of 2 percent.


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